The Paris Agreement: What does it mean for businesses and individuals?

JLL’s Dan Probst and Sarah Nicholls joined world leaders and experts from the private and public sectors at the United Nations climate conference – known as COP21 – in Paris in December, and blogged about their experiences here. Below, Sarah Nicholls discusses the COP21 outcome – known as the Paris Agreement – and what it means for the real estate and professional services industries, and you as an individual.

The message from COP21 was clear. Achieving a climate change agreement was the first step: the hard work begins now. This is particularly true for our clients and the wider real estate industry where significant opportunities exist.

What does the Paris Agreement mean for the real estate industry?

According to the United Nations Environment Programme, buildings account for “about 40% of global energy… and they emit approximately 1/3 of greenhouse gas emissions.” It is unsurprising then that more than half of the 158 carbon reduction plans submitted by UN members, known as Intended Nationally Determined Contributions (INDCs), include measures to cut energy use in buildings. The industry has a number of levers to deliver on these ambitions such as net-zero emissions buildings and value chains; renewable energy strategies; and energy efficiency retrofitting.

These measures can have a significant positive impact by reducing global carbon emissions and delivering long-term social, environmental and economic benefits. I invite you to read more about the Paris Agreement’s impact on the real estate industry through JLL’s Real Views interview with Dan Probst or via this press release about JLL’s commitment to ‘nearly zero energy buildings’ across Europe.

What does the Paris Agreement mean for the professional services industry?

Acting on climate change is a business imperative for the professional services industry, including JLL. The content of the Paris Agreement is unlikely to be sufficient to avert all serious effects of climate change, so businesses will need to ensure that they are resilient to the worst impacts. Companies can contribute to closing the ‘emissions gap’ – discussed in my last blog – by increasing ambitions, setting science-based, long-term targets, or using internal mechanisms such as carbon pricing. Leadership support is essential when taking these types of approaches to climate change. JLL’s CEO Colin Dyer – who also serves as our Executive Sustainability Sponsor – recently approved the company’s deeper engagement on climate change.

Operationally, JLL and other professional services companies need to ensure that we have fully understood and are prepared to respond to the challenges of climate change such as supply chain disruption, increased reporting obligations and stronger legislative requirements. While governments will be first in the firing line, businesses won’t escape scrutiny when it comes to delivery of the Paris Agreement. Companies will be held to account not only by the countries where they operate but also by savvy stakeholders and investors. In JLL’s case, stakeholder scrutiny has positively influenced our own sustainability program, and we expect this to continue even more so post-COP21.

What does the Paris Agreement mean for individuals?

Finally, let’s consider what this means for you, as an individual. If you live in a developing country, especially those who are increasingly susceptible to extreme weather events, the Paris Agreement could be the difference between remaining in your home and having to relocate over great distances. It means that you can plan ahead for your family’s future with some confidence. It means, in a word, security.

For those in developed countries, the impact on you depends largely on the level of commitment from your government and leading companies.

The delivery of the Paris Agreement will not happen through kind words and good intentions. It will require a paradigm shift in the way the world works and the way organizations and individuals think and behave. We all need to be ready to adapt to life in the “2°C world”.